The statement of cash flows
A) is prepared instead of an income statement under IFRS.
B) is used to assess an entity's ability to pay dividends and meet obligations.
C) is prepared from comparative income statements.
D) reflects earnings per share figures on a cash basis and on an accrual basis in the body of the statement.

Question

Quizplus · Accepted Answer

The statement of cash flows is used to assess an entity's ability to generate cash flows, pay dividends, and meet obligations. It is a separate financial statement that complements the income statement and balance sheet. The other options are incorrect: A is false as an income statement is still required under IFRS; C is incorrect as the statement of cash flows is prepared from the balance sheet, not just comparative income statements; and D is incorrect as the statement of cash flows does not typically include earnings per share figures.

The Statement of Cash Flows